Caught in the middle of Venezuela’s politics, China mulls options

Chinese diplomats in Caracas are working day and night to help Beijing determine how best to deal with Juan Guaido, the self-declared leader of Venezuela who may not favor continuing the oil-for-loans deals that have underpinned China’s relations with Venezuela for years.

China, which has invested US$50 billion dollars through oil-for-loan agreements in Venezuela over the past decade, reports the South China Morning Post.

“At the top of everyone’s mind [at the Chinese embassy and in Beijing] was the degree to which goodwill should be shown to and accepted from Guaido,” a person who had been briefed about one such conference call – and was not authorized to talk to the media.

According to the reports, Guaido has always been critical to Venezuela’s relations with China.

- paying the bills -

China’s envoys in the Venezuelan capital frequently hold late-night conference calls with officials back in Beijing as they try to set a strategy for getting along with Guaido, who declared himself Venezuela’s “interim president” on January 23, 2019.

Although the United States, Canada, the Lima Group and other Latin American countries have endorsed Guaido as the ‘legitimate’ leader of Venezuela, China had made it clear that switching support publicly Maduro to Guaido would be out of the question.

But with the future of China’s oil projects in Venezuela and nearly US$20 billion that the Maduro government owes China suddenly uncertain, China’s diplomats remained eager to find out more about the 35-year-old legislative opposition leader.

Dating back to the era of former president Hugo Chavez, China has strived to remain in close contact with Venezuelan government representatives and lawmakers affiliated with the United Socialist Party of Venezuela, which Chavez – who embraced China as a political ally – had led until 2012.

Chavez saw China as an important partner in his bid to manipulate Venezuela’s petroleum supplies to implement his radical domestic and foreign policy platforms.

- paying the bills -

China’s foreign ministry has flatly dismissed as “fake news” reports that Chinese diplomats had held talks with the political opposition in Venezuela in an attempt to protect its investments in the country.

While no formal meeting actually took place, it was clear that China was keen to uncover details about Guaido, who became leader of the opposition in the Venezuelan legislature last year

Venezuela border crossing points

“China has sought informal dialogue with the Venezuelan opposition in recent years to ensure productive relations in the event of a transition,” said Margaret Myers, director of the Asia and Latin America program at the Washington-based Inter-American Dialogue think tank.

Guaido now seeks to assure China and Russia – the two main international players that remain committed to Maduro out of geopolitical and economic considerations – that his leadership would not harm those nations’ interests in Venezuela.

The South China Morning Post this month published Guaido’s first interview with Asian media, in which he expressed interest in developing a “productive and mutually beneficial” relationship with China and said he was ready to engage Chinese officials in dialogue “as soon as possible”.

- paying the bills --

“All agreements that have been signed with China following the law will be respected,” Guaido said. “If previous agreements were signed by adhering to the due process of approval by the National Assembly, my government will accept and honor them.”

Myers said Guaido was making a “clear appeal to Chinese pragmatism” by indicating that his government “would be far more capable of repaying outstanding debts than Maduro’s”. However, she predicted Venezuela would continue to figure prominently in China’s energy security calculus, no matter how Maduro’s leadership bid turned out.

“China has continued to finance Venezuela to ensure moderate levels of productivity in the oil sector,” Myers said. “Chinese disbursements could be used to ensure support from Maduro’s base, but they aren’t aimed at propping up the Maduro government. China is likely to engage respectfully with a new government in order to achieve the best outcomes on debt restructuring,” she added.

A Juan Guaido supporter listens to a press conference in Caracas on Monday, on the fifth anniversary of opposition leader Leopoldo Lopez’s arrest for leading protests against President Nicolas Maduro. Photo: AFP

Ultimately, China cares more about ensuring it will continue to enjoy valued economic status in Venezuela than about the continuity of the Maduro government, analysts have said.

To that end, “China will avoid aligning itself with either side,” and will continue to do so until a clearer outcome emerges in the Maduro-Guaido power struggle, Myers said.

And for Chinese officials in Venezuela, that may mean many more late nights.